Tuesday, September 16, 2008

AIG Downgrades

AIG downgraded from AA to A. This of course increases the amount of capital they need to raise.

2 comments:

Omer said...

The Fed just effectively nationalized AIG! Any thoughts?

ALD said...

Not too much of a surprise, actually. What is most worrying is that Monday morning Treasury and Fed said no-way on a bailout, and 36 hours later they are lending $85B. What exactly did they see on AIG's balance sheet that scared the pants off them?

I must say it is pretty punitive terms. AIG is going to be sliced and diced like a lechon at a Cuban Christmas Eve party. If it's sold quickly enough, we (the taxpayers) may avoid most of the pain on that one.